Justice News

Chehalis Tribal Member Sentenced for Defrauding Housing Program

Former Head of Tribal Housing Authority Board Lied about Assets to Receive Tribal Housing Assistance

The former Chairman of the Board of the Chehalis Tribal Housing Authority was sentenced today in U.S. District Court in Tacoma to thirty days in jail, two years of supervised release and $37,400 in restitution for theft from a tribal organization, announced U.S. Attorney Annette L. Hayes. HECTOR RAY CANALES, SR., 55, pleaded guilty to conversion of tribal funds in May 2016. At the sentencing hearing U.S. District Judge Ronald B. Leighton said CANALES had betrayed the trust of his tribe.

According to records filed in the case, in 2009 CANALES applied for down payment assistance from the Chehalis Tribal Housing Authority knowing that he did not qualify for such assistance because he already owned a home. CANALES engaged in a sham transaction to transfer his existing ownership to a relative, so that he could collect $37,400 from the down payment assistance program which he used to pay for a second home in the Chehalis area. Even as he was “transferring” ownership of his current home, CANALES was listing the home as an asset on his mortgage application to Wells Fargo Bank. CANALES used his position in the Tribe and his knowledge of the internal fiscal controls to illegally collect the down payment funds. The fraud meant that other eligible Chehalis Tribal members did not get down payment assistance.

CANALES has since repaid just over $24,000 to the tribe.

The case was investigated by the Chehalis Tribal Police Department and the FBI.

The case was prosecuted by Assistant United States Attorney J. Tate London.